Charles Ellis' suggested portfolios by age

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hudson
Posts: 1474
Joined: Fri Apr 06, 2007 9:15 am

Re: Charles Ellis' suggested portfolios by age

Post by hudson » Tue Feb 02, 2016 6:41 pm

stemikger wrote: 60 to 70 years old -- 60% in stocks; 40% in bonds
70 to 80 years old -- 50% in stocks; 50% in bonds

As always would love to hear your opinions.

Thanks!
I think that the stock/bond ratio is an individual decision. Rules of thumb are nice starting points. It just depends.

I've heard the arguments for having high stock percentages in retirement; those arguments don't fit me.
I've heard arguments for having at least 20% in stocks; that doesn't fit me.
The "age in bonds" idea has been very useful, but that no longer works for me.
I'm just not comfortable owning stocks. At this time stocks just don't fit my situation....that could change...so I continue to read, learn, and adjust.

This quote works for me...
Bill Bernstein wrote: snip...
2) The key point about the riskiness of stocks is where you are in your lifecycle. As I said in Ages of the Investor, for the relatively young saver (from whom we've seen a lot of posts, at least in their former lives, in this thread), stocks aren't risky at all. I was once there myself. But for the retiree, with no remaining human capital, they're Chernobyl toxic.
Bill
I like Larry Swedroe's quote....
"First, if have no need to take risk, don't. Rule number one of investing. Also Rule 2 and 3."

joebh
Posts: 1708
Joined: Mon Mar 02, 2015 3:45 pm

Re: Investing Gems by Charles Ellis

Post by joebh » Tue Feb 02, 2016 6:57 pm

SpringMan wrote:
joebh wrote:
Taylor Larimore wrote:
joebh wrote:
Taylor Larimore wrote:stemiker:

Charles Ellis is one of my investing heroes. These are "Investment Gems" taken from his book, Winning The Loser's Game:

Best wishes
Taylor
Hmm, not much of a gem, IMHO. Perhaps Errol Flynn didn't have a wife or family?
Joe:

Errol Flynn's quote is not as far-fetched as it sounds. For example, I have reached age 92. My wife is gone. I have good health insurance and pension income. Accordingly, I am giving my heirs their inheritance now.

Best wishes.
Taylor
The word "any" makes the quote simply wrong.
I agree that quote is simply wrong even keeping in mind Errol Flynn died in 1959. $10 grand back then is different than it is in 2016.
Some quick Errol Flynn facts:
- Errol Flynn died at the age of 50.
- Flynn was married to actress Patrice Wymore when he died (his third wife)
- $10,000 in 1959 = a little under $82,000 in 2016.
- The value of Flynn's estate, per the probate court, was listed at "more than $20,000" in 1959, while some reports estimated it at "more than $100,000".

Maybe he died too young to live up to his quote...

Rodc
Posts: 13601
Joined: Tue Jun 26, 2007 9:46 am

Re: Charles Ellis' suggested portfolios by age

Post by Rodc » Tue Feb 02, 2016 8:00 pm

Every now and then I wonder if Bogleheads as a group are a bit too conservative.
Previous polls showed BH to hold rather more stocks than 100-age%, as an example, so not sure of the basis for this assertion.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

Runner01
Posts: 287
Joined: Thu Dec 12, 2013 7:14 pm

Re: Charles Ellis' suggested portfolios by age

Post by Runner01 » Tue Feb 02, 2016 8:04 pm

LiterallyIronic wrote:I'm early 30s and I'm at 90% stock. I would do 100%, but Vanguard doesn't have a Target Retirement Fund that aggressive. I don't have a high enough balance to do anything but the Target Funds.
You could use there ETFs where the minimum investment is whatever 1 share costs. I use VTI (Vanguard Total Stock Market ETF) in any of my accounts where I either can't buy VTSAX commission free or don't have $10,000 to meet the minimum.

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